052.md

moneyversed

medium

Improper handling of paused or non-transferrable tokens

Summary

The protocol does not handle collateral assets that can be paused for transfer or made non-transferrable properly. This may result in loans that are non-liquidatable or collateral that cannot be withdrawn.

Vulnerability Detail

The CollateralManager.sol contract does not have proper handling for collateral assets that can be paused for transfer or made non-transferrable. If a token's transfer functionality is paused or disabled, it could result in loans that cannot be liquidated or collateral that cannot be withdrawn by users.

Impact

Potential issues with loans that cannot be liquidated or collateral that cannot be withdrawn, leading to locked funds or loss of assets.

Code Snippet

https://github.com/sherlock-audit/2023-03-teller/blob/main/teller-protocol-v2/packages/contracts/contracts/CollateralManager.sol#L1

Tool used

Manual Review

Recommendation

Implement checks to ensure that the collateral assets used in the protocol are transferrable and not paused. In case a token's transfer functionality is paused or disabled, consider implementing a fallback mechanism to handle such cases and protect user assets.